Page 29 - College Planning & Management, October 2017

Business MANAGING HIGHER ED
Getting Creative With Facilities Financing
Some campus administrators are looking beyond P3s and additional debt load to find ways to finance their capital projects. Check out these ideas.
BY ELLEN KOLLIE
ACCORDING TO SALLY GRANS KORSH, FAIA, LEED-AP, director of Facilities Management & Environ- mental Policy for Washington-based National Association of College and University Business Officers (NACUBO), there are two reasons why campus administrators are seeking alternative financing methods for their facilities. “The first reason,” she indicates, “is that 80 percent of all campus costs are involved with staff salaries, which doesn’t leave a lot of wiggle room for new debt or operational costs.”
The second reason involves the facilities themselves. Many fa- cilities are 50 or more years old and have maintenance challenges that eat up operational costs. Plus, program shifts are requiring facility design changes. For example, classroom collaboration and cross-disciplinary discussions mean that classrooms lined with rows of student chairs and a desk for the instructor at the front no longer support teaching and learning needs.
So, how are administrators to come up with much-needed facilities funding? By getting creative. Here are some examples.
Establish a Foundation to Pay for Renovation and New Construction
In 1997, administrators at Western Kentucky University (WKU) in Bowling Green found themselves needing to heed a new state mandate to install fire suppression systems in their residence halls. In addition, they had a number of residence halls that needed updating. “The state had a biennial budget, and they didn’t always approve agency bonds,” says Brian Kuster, vice president of Student Affairs and executive direc- tor of WKU’s Student Life Foundation (SLF). “So we wondered how we could make improvements without asking for state bonding, especially because we knew we would not get as much money as we needed.”
The administrators created a task force comprised of employ- ees, alumni and local CEOs to brainstorm, and they landed on the idea of a 501(c)(3), which they called SLF. “In this scenario,” says Kuster, “the university would sell its housing assets to the founda- tion, and the foundation would sell bonds to get funding, with
the university maintaining management of the residence halls. In
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PHOTO COURTESY OF BBADGETT